Crude oil at new record high

Crude oil prices were up again on Friday, with West Texas Intermediate crude for June delivery going as high as $75.35 per barrel on the New York Mercantile Exchange before ending the day up by $1.48 to $75.17 per barrel.  This price was a new closing high and near inflation-adjusted records set in the late 1970s and early 1980s at around $80 per barrel.

While the average price for a gallon of gasoline topped $3 in New York, California, Hawaii, and Washington, D.C., the pump prices for gasoline in the US averaged $2.855 per gallon for regular unleaded, up 14 percent in the past month.  There were isolated shortages at some locations on the East Coast, said to be due to a lag in the changeover to summer blends.  These shortages are not expected to become serious or widespread.

Also to blame for the high oil prices were continuing problems in Iran and Nigeria.  Iran’s president was quoted as saying that it will rely on domestically produced gasoline beginning in the fall.  This was seen as a way to protect the nation against sanctions which have been sought by the US because Iran has not put its nuclear ambitions on hold.  Iran claims that its nuclear program is civilian in nature, while the Bush Administration and other western governments suspect that its goal is to produce nuclear weapons.  In Nigeria, meanwhile, militants have said that they will again begin attacking oil facilities and personnel if their demands are not met by April 25.

Adding to the unease for traders was a statement by Venezuelan President Hugo Chavez that oil could go as high as $100 per barrel if the United States were to attack Iran, as some reports say is under consideration.